NRCS CSP 503-04
SUPPLY CHAIN
MANAGEMENT POLICY
Compiled by
CFO
Approved by
CEO
Date of approval
29 January 2014
Date of implementation
01 February 2014
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Contents
1. Purpose ............................................................................................................................................ 5
2. Scope ............................................................................................................................................... 5
3. Informative and normative ............................................................................................................... 5
3.1 Normative ................................................................................................................................ 5
3.2 Informative ............................................................................................................................... 5
4. Definitions and Terminology ............................................................................................................ 5
5. Annexures ........................................................................................................................................ 8
6. Replacement and withdrawal ........................................................................................................... 8
7. Revision history ................................................................................................................................ 9
8. Elements of Supply Chain Management ....................................................................................... 10
9. Demand Management ................................................................................................................... 10
10. Acquisition Management ........................................................................................................... 11
10.1 General Principles ................................................................................................................. 11
10.2 Threshold values for Acquisitions ......................................................................................... 12
11. Logistics Management .............................................................................................................. 12
11.1 General .................................................................................................................................. 12
11.2 Placing of orders ................................................................................................................... 12
11.3 Ordering process ................................................................................................................... 12
11.4 Vendor performance ............................................................................................................. 12
11.5 Stores/warehouse management ........................................................................................... 13
11.6 Issuing/distribution of items ................................................................................................... 13
11.7 Stocktaking ............................................................................................................................ 13
12. Disposal and Letting of State Assets ........................................................................................ 13
13. Service Providers and Specialised Services ............................................................................. 14
13.1 Service Provider Performance and Selections ..................................................................... 14
13.2 Procurement of Information Technology and Information Technology Services .................. 14
13.3 Appointment of Consultants .................................................................................................. 15
14. Price Quotations ........................................................................................................................ 17
14.1 Price Quotations Process ...................................................................................................... 17
14.2 Price Quotations requirements .............................................................................................. 17
15. Competitive Bids ....................................................................................................................... 18
15.1 Competitive Bidding Process ................................................................................................ 18
15.2 Invitation of Bids .................................................................................................................... 18
15.3 Bid Specification Committee ................................................................................................. 18
15.4 Bid Evaluation Committee ..................................................................................................... 19
15.5 Bid Adjudication Committee (BAC) ....................................................................................... 19
16. Deviations to Normal Procurement Procedures ........................................................................ 21
17. Contracts and Legal Services ................................................................................................... 21
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17.1 Contracts ............................................................................................................................... 21
17.2 Contract Administration ......................................................................................................... 22
17.3 Legal Services ....................................................................................................................... 23
18. Other considerations ................................................................................................................. 23
18.1 Risk Management ................................................................................................................. 23
18.2 Training of SCM Officials ...................................................................................................... 23
18.3 Non-Compliance ................................................................................................................... 23
18.4 National Industrial Participation Programme (NIPP) ............................................................. 24
18.5 Reporting of Supply Chain Management Information ........................................................... 24
19. Compliance, Responsibilities and Accountabilities ................................................................... 24
19.1 SCM Official’s responsibilities ............................................................................................... 24
19.2 Responsibilities of all employees, including SCM Officials ................................................... 24
19.3 NRCS Management Responsibilities .................................................................................... 25
19.4 Finance Department’s responsibilities .................................................................................. 25
20. SCM transaction principles ....................................................................................................... 26
20.1 NRCS Financial Thresholds .................................................................................................. 26
20.2 Exceptions iro quotations and RFQ’s .................................................................................... 26
20.3 Goods and Services above the transaction value of R 500 000 (VAT Included) .................. 26
21. Bids based on functionality as a criterion .................................................................................. 27
22. NRCS Suppliers ........................................................................................................................ 28
22.1 Registration of suppliers on the accounting system.............................................................. 28
22.2 Establishment of supplier database ...................................................................................... 28
23. Pre SCM Process ...................................................................................................................... 29
23.1 Process preceding the SCM process .................................................................................... 29
23.2 Process preceding the SCM process .................................................................................... 29
24. Obtaining of quotes / RFQ Process .......................................................................................... 30
24.1 Process flow for RFQ process .............................................................................................. 30
24.2 Obtaining quotes for RFQ ..................................................................................................... 31
24.3 Quotes not required .............................................................................................................. 31
24.4 Issuing of Requisitions .......................................................................................................... 31
24.5 Orders ................................................................................................................................... 31
24.6 GRV and Payments .............................................................................................................. 32
25. The Bid / Tender Process ......................................................................................................... 32
25.1 Process flow for bid / tender process .................................................................................... 32
25.2 Bid Adjudication Committee .................................................................................................. 33
25.3 User requirements and Business Case /motivations ............................................................ 33
25.4 Specification of goods/works or services .............................................................................. 33
25.5 The RFB Process .................................................................................................................. 34
25.6 Planning an RFB ................................................................................................................... 34
25.7 Preparing the Bid Documents ............................................................................................... 35
25.8 Publication of Bids ................................................................................................................. 35
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25.9 Information Meetings or Site Inspections .............................................................................. 35
25.10 Communicating with Prospective Bidders ......................................................................... 36
25.11 Changing of Information .................................................................................................... 36
25.12 Submission of Bids ............................................................................................................ 36
25.13 Closing Date of Bids .......................................................................................................... 36
25.14 Validity Period of Bids ....................................................................................................... 37
25.15 Opening and Screening of Bids ........................................................................................ 37
25.16 Late Bids ........................................................................................................................... 37
25.17 Consideration of Bids ........................................................................................................ 37
25.17.1 Clarification of Responses ............................................................................................ 37
25.17.2 Cancellation and Re-invitation of Bids .......................................................................... 37
25.18 Other matters iro Bids ....................................................................................................... 38
25.19 SARS Tax Clearance Certificate ....................................................................................... 38
25.20 Evaluation of Bids.............................................................................................................. 38
25.21 Evaluation Phases............................................................................................................. 39
25.21.1 Phase 1: Mandatory Specification Evaluation ............................................................... 39
25.21.2 Phase 2: Financial Evaluation ....................................................................................... 39
25.21.3 Phase 3: Awarding of Points ......................................................................................... 39
25.21.4 Phase 4: Calculation of points for B-BBEE status level of contributor .......................... 40
25.21.5 Phase 5: Company Profile ............................................................................................ 40
25.21.6 Phase 6: Approval of Bids ............................................................................................. 40
25.22 Evaluation of bids that scored equal points ...................................................................... 41
25.23 Notification and Debriefing ................................................................................................ 41
25.24 Contract Negotiation and signing ...................................................................................... 41
26. Records ..................................................................................................................................... 41
27. ANNEXURE A : SCM DELEGATION OF AUTHORITY ........................................................... 42
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SECTION 1: MANDATORY INFORMATION
1. Purpose
This document serves to set the policy for a fair, equitable, transparent, competitive, cost effective and
uniform acquisition process for goods and services within the NRCS.
2. Scope
The scope of this document is to outline the policy that must be followed by NRCS staff for the
acquisition of goods and services.
3. Informative and normative
3.1 Normative
CPO 620 Conflict of Interest
CSP 502 Approval routes and limits for expenditure - Delegation of Authority
CSP 520 Petty cash
CSP Code of Conduct
CSP Asset Management Policy
CPO 600 Fraud Prevention Policy
CPO 160 Enterprise Risk Management Policy
PFMA Public Finance Management Act (No.1 of 1999, as amended)
PPPFA Preferential Procurement Policy Framework Act, 2000 (No.5 of 2000, as amended)
BBBEEA Broad Based Black Economic Empowerment Act, 2003 (No.53 of 2003
PAIA The Promotion to Access of Information Act, (No.2 of 2000, as amended)
PAJA Promotion of Administrative Justices Act, 2000 (Act 3 of 2000 as amended)
SITA State Information Technology Act, 1998 (Act 88 of 1998 as amended)
National Treasury Circulars, Guidelines and Practice Notes on SCM
The Prevention of and Combating of Corrupt Activities Act (No.12 of 2004 as amended)
Competition Act, 1998 (Act 89 of 1998 as amended)
CIDB Act 38 of 2000
3.2 Informative CPO 110 Code of ethics
CPO 601 Zero tolerance fraud and corruption policy
4. Definitions and Terminology
Term /
Abbreviation
Definition /
explanation
Details
Accounting
Authority
NRCS Board Accountable authority for a public entity as indicated in the
PFMA.
B-BBEE Broad Based Black
Economic
Empowerment Act
(No.53 of 2003)
Means broad-based black economic empowerment as defined
in section 1 of the Broad-Based Black Economic Empowerment
Act.
B-BBEE
status level of
Means the B-BBEE status received by a measured entity based
on its overall performance using the relevant scorecard
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Term /
Abbreviation
Definition /
explanation
Details
contributor contained in the Codes of Good Practice on Black Economic
Empowerment, issued in terms of section 9(1) of the Broad-
Based Black Economic Empowerment Act.
BEC Bid Evaluation
Committee
Committee appointed by the CFO to evaluate bids and
recommend bids for award.
BSC Bid Specification
Committee
Committee appointed by the CFO to establish the requirements
for a new bid.
BAC Bid Adjudication
Committee
Committee appointed by the CEO to award bids.
BU Head Business Unit Head Head of a business unit within NRCS, regardless of the level of
seniority.
Bid or tender Means a written offer in a prescribed or stipulated form in
response to an invitation by NRCS for the provision of services,
works or goods, through price quotations, advertised
competitive bidding processes or proposals.
Bidder Any natural or legal person who makes an offer in response to
an RFB, RFP or RFQ.
CEO Chief Executive
Officer
Is the Administrative head of the NRCS
CFO Chief Financial
Officer
General responsibility of the CFO is to assist the Accounting
Authority in discharging the duties prescribed in Part 2 of
Chapter 6 of the PFMA.
Chairperson Means the person duly elected to chair any of the SCM bid
committees.
Closed Bid Any bid that is not open for general public and limits the number
of possible responses.
EME Exempted Micro
Enterprises
Means any enterprise with annual total revenue of R5 million or
less.
Executive Most senior head of a business unit, appointed as an Executive
or acting executive in the NRCS
Fruitless and
Wasteful
Expenditure
Expenditure which was made in vain and would have been
avoided had reasonable care been exercised as defined in the
PFMA.
Functionality Means the measurement according to predetermined norms, as
set out in the tender documents, of a service or commodity that
is designed to be practical and useful, working or operating,
taking into account, among other factors, the quality, reliability,
viability and durability of a service and the technical capacity
and ability of a tenderer.
GRV Goods receipt
voucher
An internal transaction to record the receipt of goods from
suppliers.
HDI/PDI Historically /
Previously
disadvantaged
individual
An individual as defined in the PPPFA who is a South African
citizen who previously had no participation in National Elections
prior to the introduction of the Constitution, and/or who is
female and/or as a disability.
Irregular
Expenditure
Expenditure, other than unauthorised expenditure, incurred in
contravention of, or that is not in accordance with a requirement
of any applicable legislation, as defined in the PFMA.
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Term /
Abbreviation
Definition /
explanation
Details
Outsourcing The provision of an agreed deliverable or level of service for a
pre-determined fee stipulated in a formal agreement.
Official Means a person in the employ of NRCS.
Level “A”
delegation
The highest level of delegation below that of CEO. This level of
authority is usually delegated to an Executive.
It can also be delegated to a specific person for a specific project,
period or function that a person performs on a regular basis as
part of that person’s performance of his/ her daily duties.
Level “B”
delegation
The next lower level of delegation to a level “A” delegation. This
level of authority is usually, but not necessarily delegated to a
General Manager.
Such delegations may also be given to Regional Manager /
Senior Managers / Manager in business units where there is no
General Manager.
It can also be delegated to a specific person for a specific project,
period or function that a person performs on a regular basis as
part of that person’s performance of his/ her daily duties.
Management Refers to the level below the Executives and includes General
Managers, Senior Managers and Managers.
PFMA Public Finance
Management Act
To regulate Financial Management in entities, national
government and provincial governments; to ensure that all
revenue, expenditure, assets and liabilities of those
governments are managed efficiently and effectively; to provide
for the responsibilities of persons entrusted with financial
management in those governments.
PPPFA Preferential
Procurement Policy
Framework Act (Act
No.5 of 2000) &
Regulations
Act which provides preference towards previously
disadvantaged individuals and RDP goals.
Preferred
Supplier
A type of a supplier from which NRCS can derive economic
benefits as compared to other similar suppliers.
QSE Qualifying Small
Enterprises
Qualifying Small Enterprises as defined in the DTI’s BBBEE
Act.
QN Quotation note Refers to a quotation which is received from a supplier
Rand Value Means the total estimated value of a contract in South African
currency, calculated at the time of tender invitations, and
includes all applicable taxes and excise duties.
Restricted
Service
Provider
Means A Non-preferred Service Provider who has been listed
by National Treasury and must not be used by the NRCS for
the entire period of prohibition.
RFB
RFP
Request for Bid or
Request for
Proposal
Request for a purchase above the threshold value for
quotations sent out on bid to the market.
RFI Request for
Information
Request for information on purchase of goods and services.
RFQ Request for
Quotation
Request for purchase which is below the threshold value of
bids.
SARS South African
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Term /
Abbreviation
Definition /
explanation
Details
Revenue Services
SLA Service Level
Agreement
An agreement between the NRCS and a provider of services to
the NRCS.
SCM Supply Chain
Management
An organ intended to formalise the procurement environment
within the NRCS.
Sub-
Contracting
The primary contractor’s assigning or leasing or making out
work to, or employing another person to support such a primary
contractor in the execution of part of a project in terms of the
contract.
TOR Terms of Reference Statement of the background, objectives, and purpose of a
program, project, or proposal.
TR Treasury
Regulations
Regulations issued by National Treasury which support the
implementation of the PFMA.
Tax
Clearance
Certificate
A Tax Clearance Certificate as issued by the South African
Revenue Services, where the bidder is registered for Income
Tax or VAT purposes.
Transversal
Contract
Means period contracts that are arranged by National Treasury
for more than one Department to participate in.
Unsolicited
Bid
Means a proposal presented to the NRCS by a contractor,
consultant or service provider, through his/her own initiative,
without having been invited to do so by the NRCS.
Unauthorized
Expenditure
Overspending of a
budget or not in line
with the main
purpose of the
budget
A payment or part of a payment on a good or service
authorised in terms of the budget, resulting in the total amount
appropriated for the budget item concerned, being exceeded
without being approved according to the Delegation of Authority
(CSP501), as per the PFMA.
VAT Value Added Tax Value-Added Tax is commonly known as VAT. VAT is an
indirect tax on the consumption of goods and services in the
economy. Revenue is raised for government by requiring
certain businesses to register and to charge VAT on the taxable
supplies of goods and services. These businesses become
vendors that act as the agent for government in collecting the
VAT.
5. Annexures
5.1 Annexure A: SCM Delegation of Authority
6. Replacement and withdrawal
This Policy replaces the previous Procurement policy – CSP 503-03
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7. Revision history
Rev No Effective date Nature of revision
01 Editorial changes, alignment of terminology with NT
notes and clarification of certain delegations and
deviations. Refer to:
Clause 4 (definitions) and clauses
11.9.3.6; 23.5.2; 23.5.3; 27.1,2,3,4,5; 27.5.2;
27.5.3; 27.6.2; 27 6.3; 33.2; 34.2.1.4; 34.27 and
34.29(f)
Annex A Monetary threshold values
Annex B – Delegation authority
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SECTION 2: SCM POLICY
8. Elements of Supply Chain Management
A supply chain management system must-
8.1 Be fair, equitable, transparent, competitive and cost effective;
8.2 Be consistent with the Preferential Procurement Policy Framework Act, 2000 (Act 5 of 2000);
8.3 Be consistent with the Broad Based Black Economic Empowerment Act, 2003 (Act 53 of
2003); and
8.4 Provide for at least the following-
8.4.1 Demand management;
8.4.2 Acquisition management;
8.4.3 Logistics management;
8.4.4 Disposal management;
8.4.5 Risk management; and
8.4.6 Regular assessment of supply chain performance.
9. Demand Management
9.1 Demand management is the first phase of SCM. The objective is to ensure that the resources
required to fulfill the needs identified in the strategic plan of the institution are delivered at the
correct time, price and place and that the quantity and quality will satisfy those needs. As part
of this element of SCM, a total needs assessment should be undertaken. This analysis should
be included as part of the strategic planning process of the NRCS and hence will incorporate
the future needs.
9.2 The SCM Unit must ensure that:
9.2.1 Future as well as current needs are understood;
9.2.2 Requirements are linked to the budget;
9.2.3 Specifications are determined;
9.2.4 The need forms part of the strategic plan of the NRCS;
9.2.5 An industry and commodity analysis is conducted
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9.3 Demand Management is intended to build discipline into how the NRCS plans for its business
requirements, the implementation of this element of SCM will be a phased approach.
9.4 BU Heads must, annually, align activities in their business plan, operational plan and
approved budget allocations, with the capital procurement requirements of the NRCS to
develop a Demand Management Plan.
9.5 The Supply Chain Manager must analyze key issues, assess the appropriateness of existing
purchases and identify the need and time frames for new requirements in support of service
delivery.
9.6 The Supply Chain Manager must develop sourcing strategies and buying mechanisms to
address the Demand Management Plan.
9.7 The NRCS must submit to the relevant authority by 30 April of each year, a procurement plan
containing all planned procurement for the financial year in respect of the procurement of
goods, works and/or services which exceed R500 000 (all applicable taxes included).
9.8 The procurement plan must be approved by the CEO prior to its submission.
9.9 The Supply Chain Manager may consider the following alternative strategies prior to the
acquisition process:
9.9.1 acquisition of redundant/obsolete material, goods and assets from other institutions;
9.9.2 sourcing of expertise from other institutions;
9.9.3 utilization of transversal contracts administered by other institutions;
9.9.4 local versus international sourcing; or
9.9.5 public / private partnerships.
10. Acquisition Management
10.1 General Principles
10.1.1 Acquisition Management provides guidance on how goods, services and assets should be
procured from the market place.
10.1.2 All procurement over R500 000 must be in line with the Demand Management Plan.
Exceptions must be approved by the CEO.
10.1.3 Service Providers must be selected on the basis of best value for money, therefore the
selection of Service Providers must be based on functionality and price according to the
threshold value’s indicated in the attached Annexure A.
10.1.4 All NRCS staff members must comply with the standard procurement methods, which include
quotations and Bids.
10.1.5 The appointment of consultants must adhere to standard procurement procedures as
indicated in Practice Note 3 of 2003.
10.1.6 It is the responsibility of the end-user / BU Head to finalise detailed terms of reference /
specifications and manage the appointed consultants.
10.1.7 NRCS staff members may only consider an unsolicited Bid by a Service Provider in
conjunction with Practice Note 11 of 2008/2009.
10.1.8 The business unit will pre-empt the procurement process by completing the following:
10.1.8.1 A completed requisition, duly approved ito the Delegation of Authority
10.1.8.2 A business case duly authorised in terms of the Delegation of Authority for all
procurement over R30 000.00 or where SCM deems necessary.
10.1.9 The Supply Chain Manager will initiate the formal process after which BEC evaluation will be
constituted to evaluate the bids received and arriving at a recommendation that will be
submitted to the BAC.
10.1.10 Bids awards shall be published in the media by which the bids were advertised.
10.1.11 NRCS shall comply with all Treasury Regulations relating to Supply Chain Management that
will be issued from time to time.
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10.2 Threshold values for Acquisitions
The threshold values for procurement of goods, works and services:
Value Procurement method
Up to R2000 No quotes necessary
Above R2000 up to
R10 000 per case
At least three (3) verbal or written quotations must be obtained and where possible
from the list of prospective suppliers and the official order must be placed against a
written confirmation from the selected supplier if the quotation was submitted verbally.
Above R10 000 up
to R30 000 per case
At least three (3) written quotations must be obtained from as many suppliers as
possible that are registered on the list of prospective suppliers
Above R30 000 up
to R500 000 per
case
Invite and accept written price quotations for requirements up to an estimated value of
R500 000 from as many suppliers as possible, that are registered on the list of
prospective suppliers. The 80/20 preference point system is applicable to bids with
Rand value equal to, or above R30 000 and up to a Rand value of R1 million (all
applicable taxes included). No tender may be awarded to any person whose tax
matters have not been declared by the South African Revenue Services to be in order.
Above R500 000 per
case
Competitive bids must be invited for all procurement above R500 000. Should it be
impractical to invite competitive bids for specific procurement, e.g. in urgent cases or in
case of a sole supplier, the NRCS may procure the required goods or services by
other means, such as price quotations or negotiations in accordance with Treasury
Regulation 16A6.4. No tender may be awarded to any person whose tax matters have
not been declared by the South African Revenue Services to be in order. The 90/10
preference point system is applicable to bids with a Rand value above R 1 million (all
applicable taxes included).
11. Logistics Management
11.1 General
This aspect pertains, among others, to coding of items, setting of inventory levels, placing orders,
receiving and distribution, stores/warehouse management, expediting orders, transport management
and vendor performance. This process should also activate the financial system to generate
payments.
11.2 Placing of orders
An order should be placed either when a pre-determined stock level is reached or when a request is
received from an end user for an item which is not held in stock.
11.3 Ordering process
11.3.1 Contract purchase: Where a contract exists, orders should be placed for the item from the
contract.
11.3.2 Price quotations/competitive bidding method: Where there is no contract, the price quotation
or competitive bidding method of ordering should be applied within delegated authority.
11.4 Vendor performance
The reliability of the supplier should be monitored in terms of, among others-
11.4.1 Delivery periods;
11.4.2 Quality; and
11.4.3 Quantity
Should problems be encountered, they should be followed up with the vendor and, if it is a contract
item, it should also be reported to the body that arranged the contract.
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11.5 Stores/warehouse management
11.5.1 Expediting orders: If the delivery conditions reflected on the order form are not complied
with, it should be followed up with the supplier immediately.
11.5.2 Receiving of items: All goods received should be verified for quality and quantity against the
ordering documentation. It is recommended that a receipt voucher be generated for payment
purposes.
11.5.3 Storage: Municipal, legal stipulations and safety regulations should be complied with when
items are being stored, e.g. flammables, poison, explosives, ammunition, weapons, etc. An
effective item location system should be utilized. Shelf-life of stock should be taken into
consideration.
11.5.4 Stock and equipment should be stored properly and arranged in such a manner that the
checking and handling thereof are being facilitated and the possibility of damage, exposure,
deterioration and perishing thereof is limited or eliminated.
11.6 Issuing/distribution of items
11.6.1 An issue voucher should be generated for all goods issued.
11.6.2 Consumable items should not be recorded after issue.
11.6.3 Non-consumable items should be recorded from receipt to disposal.
11.6.4 Transit officials should ensure that goods are delivered promptly to the end-user.
11.7 Stocktaking
Stocktaking of all assets in stock or on distribution shall be conducted at least once a year. This
procedure entails the comparison of stock counted with official records of what should be in stock.
Differences should then be accounted for.
12. Disposal and Letting of State Assets
12.1 Disposal of movable assets must be at market-related value or by way of price quotations,
competitive bids or auction, whichever is most advantageous to the state, unless determined
otherwise by the relevant Treasury.
12.2 Notwithstanding the provisions of the paragraph above, the NRCS may transfer movable
assets free of charge to other departments, constitutional institutions or public entities by
means of formal vouchers.
12.3 Any sale of immovable state property must be at market-related value, unless the relevant
treasury approves otherwise.
12.4 The letting of immovable state property (excluding state housing for officials and political
office bearers) must be at market-related tariffs, unless the relevant treasury approves
otherwise. No state property may be let free of charge without the prior approval of the
relevant treasury.
12.5 The NRCS must review, at least annually when finalizing the budget, all fees, charges, rates,
tariffs or scales of fees or other charges relating to the letting of state property to ensure
sound financial planning and management.
12.6 The NRCS must, when disposing of computer equipment, firstly approach any state institution
involved in education and/or training to determine whether such an institution requires such
equipment. In the event of the computer equipment being required by such a state institution,
the NRCS may transfer such equipment free of charge to the identified institution.
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13. Service Providers and Specialised Services
13.1 Service Provider Performance and Selections
13.1.1 Supply Chain Management Unit shall verify the National Treasury’s Register for Tender
Defaulters and Database of Restricted Suppliers prior to awarding any bid to ensure that no
recommended bidder or any of its directors are listed as companies or persons prohibited
from doing business with the public sector.
13.1.2 The NRCS must use the service provider database when considering the procurement of any
goods or services through quotations.
13.1.3 The following exceptions shall apply where NRCS is able to obtain quotes outside its
database, where the SCM Manager shall approve such cases:
13.1.3.1 In instances where there are insufficient suppliers on the database
13.1.3.2 The current suppliers approached for quotes are not responsive
13.1.3.3 The services requested are unique
13.1.3.4 Certain emergency cases
13.1.4 The Supply Chain Manager must ensure that the service provider database is accurately
maintained.
13.1.5 At the completion stage of material projects, an assessment of the service and service
provider should be undertaken and this assessment should be available for future reference.
13.1.6 Payment to supplier will only be for goods supplied or services rendered.
13.2 Procurement of Information Technology and Information Technology Services
13.2.1 NRCS as a Schedule 3A entity may at its discretion on whether to acquire any of the
mandatory or non-mandatory services from SITA.
13.2.2 Mandatory (“must”) services that are to be provided by SITA. SITA must provide the following
services to national and provincial departments
13.2.2.1 Provide or maintain a private telecommunication network or a value added
network;
13.2.2.2 Provide and maintain transversal or departmental specific information systems;
13.2.2.3 Provide data-processing or associated services for transversal or departmental
specific information systems;
13.2.2.4 Provide IT (Information Technology) for Government;
13.2.2.5 Set standards for interoperability;
13.2.2.6 Set standards for ISS (information security standards)
13.2.2.7 Set standards for Certification of IT acquisition;
13.2.2.8 Certify all acquisitions for standard compliance;
13.2.2.9 Eliminate duplication; and
13.2.2.10 Leverage economies of scale
13.2.3 Non mandatory (‘may”) services that may be provided by SITA
13.2.3.1 Training in IT or information systems;
13.2.3.2 Application software development;
13.2.3.3 Maintenance of software and infrastructure;
13.2.3.4 Data process for department specific applications or systems;
13.2.3.5 Technology or business advice for IT;
13.2.3.6 Research and development;
13.2.3.7 Management services for IT; and
13.2.3.8 Sell or provide authentication products
13.2.4 In the event that these services are acquired from SITA, it should be in accordance with
business and service level agreements. Should SITA indicate in writing that it is unable to
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provide the service itself, SITA will act as the procurement agent to acquire such services on
behalf of NRCS.
13.2.5 In instances where SITA acts as the procurement agent on behalf of an institution, SITA must
facilitate the procurement process strictly in terms of the prescribed legislation. SITA will
make a recommendation to NRCS on a preferred bidder(s). The NRCS, however, retains the
right to accept or reject SITA’s recommendation.
13.3 Appointment of Consultants
13.3.1 Appointment for consultants for specific products may be considered. However, appointment
of consultants may only be done with prior approval of the Chief Executive Officer and in line
with Practice Note 3 of 2003.
13.3.2 Consultants should be appointed by means of competitive bidding processes, whenever
possible. All bids and contracts should be subject to the General Conditions of Contract
(GCC) issued by the National Treasury.
13.3.3 The term consultants includes, among others, consulting firms, engineering firms,
construction managers, management forms, procurement agents, inspection agents, auditors,
other multinational organizations, investment and merchant banks, universities, research
agencies, government agencies, non-governmental organizations (NGOs), and individuals.
13.3.4 The NRCS may use these organizations as consultants to assist in a wide range of activities
such as policy advice, NRCS’s reform management, engineering services, construction
supervision, financial, procurement services, social and environmental studies and
identification, preparation, and implementation of projects to complement NRCS’s capabilities
in these areas.
13.3.5 Consultants should only be engaged when the necessary skills and/or resources to perform a
project/duty/study are not available and the NRCS cannot be reasonably expected either to
train or to recruit people in the time available.
13.3.6 The relationship between the NRCS and the consultant should be one of purchaser / provider
and not employer / employee. The work undertaken by consultant should be regulated by a
contract. The NRCS is, however, responsible for monitoring and evaluating contractor
performance and outputs against project specifications and targets and should take remedial
action if performance is below standard.
13.3.7 The procedures outlined herein apply to all contracts for consulting services. In procuring
consulting services, the NRCS should be satisfied that
13.3.7.1 the procedures to be used will result in the selection of consultants who have the
necessary professional qualifications;
13.3.7.2 the selected consultant will carry out the assignment in accordance with the
agreed schedule, and
13.3.7.3 the scope of the services is consistent with the needs of the project.
13.3.8 The NRCS should be responsible for preparing and implementing the project, for selecting the
consultant, awarding and subsequently administering the contract. While the specific rules
and procedures to be followed for selecting consultants depend on the circumstances of the
particular case, at least the following major considerations should guide the NRCS’s policy on
the selection process:
13.3.8.1 the need for high-quality services;
13.3.8.2 the need for economy and efficiency;
13.3.8.3 the need to give qualified consultants an opportunity to compete in providing the
services; and
13.3.8.4 the importance of transparency in the selection process.
13.3.9 Considerations could include, but are not limited to:
13.3.9.1 Qualification of key personnel
13.3.9.2 Experience relevant to assignment
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13.3.9.3 Methodology used
13.3.9.4 Training or transfer of knowledge and skills
If the assignment includes an important component for training or transfer of
knowledge and skills, the Terms of Reference (TOR) should indicate the
objectives, nature, scope and goals of the training programme, including details
of trainers and trainees, time frames and monitoring and evaluation
arrangements. The cost for the training programme should be included in the
consultant’s contract and in the budget for the assignment.
13.3.10 Establishment of a list of approved service providers
13.3.10.1 Where consultancy services are required on a recurring basis, a panel of
consultants / list of approved service providers for the rendering these services
may be established. These panels / lists should be established through the
competitive bidding process, usually for services that are of a routine or simple
nature where the scope and content of the work to be done can be described in
detail.
13.3.10.2 The intention to establish a panel / list of approved service providers is published
in the Government Tender Bulletin and the closing time and date for inclusion in
the panel/list of approved service providers should be indicated. For this purpose,
a questionnaire should make provision for the following:
Full details of the service provider, among others:
Composition of the firm in terms of shareholding;
Personnel complement;
Representation of expertise in respect of the disciplines required, e.g.
accounting, legal, educational, engineering, computer, etc
National / international acceptability of experts in the various professions;
Experience as reflected in projects already dealt with; and
Financial position
Requirements for admission to the list and criteria should be linked to the numeric
value in terms of which applicants will be measured, for example qualifications,
experience, acceptability and resources, etc. A pre-determined standard method
of awarding points should be followed.
13.3.10.3 The applications received should be evaluated and any rejection of applicants
should be motivated and recorded.
13.3.10.4 Once the panel/approved list of service providers has been approved, only the
successful applicants are approached, depending on the circumstances, either by
obtaining quotes on a rotation basis, or according to the bid procedure when
services are required, with the exception that the requirement is not advertised in
the Government Tender Bulletin again.
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14. Price Quotations
14.1 Price Quotations Process
14.2 Price Quotations requirements
14.2.1 Transaction values up to R2 000
14.2.1.1 There is no requirement for quotations
14.2.1.2 In the event Petty cash is utilised to pay for the transaction, the Bank and Cash policy
must be adhered to
14.2.2 Transaction values over R2 000 up to R 10 000
14.2.2.1 At least three (3) verbal or written quotations must be obtained.
14.2.2.2 Where possible quotes should be from the list of prospective suppliers
14.2.2.3 An official order must be placed against a written confirmation from the selected
supplier if the quotation was submitted verbally
14.2.3 Transaction values over R 10 000 up to R 30 000
14.2.3.1 At least three (3) written quotations must be obtained from as many suppliers as
possible
14.2.3.2 Suppliers should be registered on the list of prospective suppliers, exceptions may
however exist. (Refer 20.2)
14.2.3.3 An official order must be placed against a written confirmation from the selected
supplier.
14.2.4 Transaction values over R 30 000 up to R 500 000
14.2.4.1 Invite and accept written price quotations for requirements up to an estimated value
of R500 000 from as many suppliers as possible,
14.2.4.2 Suppliers should be registered on the list of prospective suppliers.
14.2.4.3 The 80/20 preference point system is applicable to bids with Rand value equal to, or
above R30 000 and up to a Rand value of R1 million (all applicable taxes included).
14.2.4.4 No tender may be awarded to any person whose tax matters have not been declared
by the South African Revenue Services to be in order.
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15. Competitive Bids
15.1 Competitive Bidding Process
15.2 Invitation of Bids
15.2.1 Bid documents must be compiled by making use of Standard Bid Documents, General
Conditions of Contract, Special Conditions of Contract and the relevant Terms of Reference
or Specifications.
15.2.2 The CFO must authorize the levying of a non-refundable deposit for Bid documents as and
when required.
15.2.3 All invitations for Bid using the bidding process must be advertised in the Government Tender
Bulletin for a period of at least 21 days before the closing date.
15.2.4 The BAC may approve a shortening of the closing period to a minimum of 14 days.
15.2.5 Bids received after the closing period must not be considered.
15.3 Bid Specification Committee
15.3.1 The Bid specification committee shall be appointed by the CFO, on recommendation from the
SCM Manager and must meet prior to the invitation of any Bid.
15.3.2 The BSC should comprise of 3 or more representatives to make up the diverse, cross
functional team. The BSC may include (but not limited to):
15.3.2.1 The BU Head
15.3.2.2 Functional expert
15.3.2.3 Managers responsible or associated with the bid,
15.3.2.4 End users,
15.3.2.5 Supply Chain representative,
15.3.2.6 External consultants, where necessary
15.3.3 The responsibility of the this committee is to prepare a specification or terms of reference for
a bid, that is consistent with procurement policies and regulations, that covers the total scope
of the project, that takes into account all the deliverables and requirements of the bid.
15.3.4 The BSC must also determine the evaluation criteria for every Bid.
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15.3.5 The specifications should be written in an unbiased manner to allow all potential bidders to
offer their goods and or services.
15.3.6 Evaluation criteria and bid specifications must be approved by the Bid Adjudication
Committee.
15.4 Bid Evaluation Committee
15.4.1 This committee is responsible for the evaluation of bids received, which includes:
15.4.1.1 The assessment of functionality (the capability/ability of the bidder to execute the
contract)
15.4.1.2 The bidders compliance to the mandatory criteria (eg: tax clearance certificate
issued by SARS, or other mandatory criteria included in the specification)
15.4.1.3 Assessment of compliance to the national industrial participation programme
requirements (only applicable for contracts in excess of R10 million)
15.4.2 The BEC must only evaluate bids in accordance with the criteria specified in the bid
documentation.
15.4.3 The Bid Evaluation Committee members must be appointed by the CFO.
15.4.4 The BEC should comprise of 3 or more representatives to make up the diverse, cross
functional team. The BEC may include (but not limited to):
15.4.4.1 The BU Head
15.4.4.2 Functional expert
15.4.4.3 Managers responsible or associated with the bid,
15.4.4.4 End users,
15.4.4.5 Supply Chain representative,
15.4.4.6 External consultants or independent experts as observers, where necessary
15.4.5 The Evaluation Committee must evaluate the functional requirements of the Bids and must
make recommendations to the Bid Adjudication Committee.
15.5 Bid Adjudication Committee (BAC)
15.5.1 The Bid Adjudication Committee must be appointed in writing by the CEO and the CEO will
determine the term of office for members.
15.5.2 The BAC must consist of at least four senior officials constituted as follows:
BAC Role Stipulations
Chairperson Where possible, the chairperson should be the Chief Financial Officer.
Other members The Bid Adjudication Committee should be composed of cross-
functional teams comprising:
A minimum of 3 senior officials (management)
SCM representative
Legal representative
Where considered necessary, additional officials or advisors may
be co-opted on account of their specialized knowledge.
Secretariat An official from the institution’s SCM Unit must be made available to act
as secretary.
Quorum
The Bid Adjudication Committee should only consider
recommendations/ reports if at least sixty percent (60%) of its members
are present.
Secundi For the purpose of continuity and not to delay meetings, the CEO may
also appoint secondi to temporarily replace members that are absent
from meetings due to illness, leave, etc. The CEO will also decide
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BAC Role Stipulations
whether or not such secundi will have the same powers as members.
BEC
representation
The project owner shall be in attendance when their bid is discussed,
but will not have voting rights
Members of BEC may present / assist in presenting the report to the
BAC.
15.5.3 The Bid Adjudication Committee must consider the recommendations / reports of the Bid
Evaluation Committee and:
15.5.3.1 Make a final award
15.5.3.2 Make another recommendation to the Project owner on how to proceed with the
relevant procurement in the event that an award is not made.
15.5.4 The SCM unit must ensure that relevant approvals in terms of the Delegation of Authority are
obtained after the BAC has made its award.
15.5.5 The Bid Adjudication Committee must ensure that:
15.5.5.1 All necessary bid documents have been submitted;
15.5.5.2 Disqualifications are justified and that valid and accountable reasons /
motivations were furnished for passing over the bids;
15.5.5.3 Scoring has been fair, consistent and correctly calculated and applied; and
15.5.5.4 Bidders’ declarations of interest have been taken cognizance of.
15.5.6 If a bid other than the one recommended by the Bid Evaluation Committee is approved by the
Bid Adjudication Committee, the CEO, must first be notified.
15.5.6.1 The CEO may after consideration of the reasons for the deviation, ratify or reject
the decision of the Bid Adjudication Committee.
15.5.6.2 If the decision of the Bid Adjudication Committee to approve the one other than
the one recommended by the Bid Evaluation Committee is ratified, the Auditor-
General, the relevant provincial treasury and the National Treasury must be
notified of the reasons for deviating from such considerations.
15.5.7 The CEO / Accounting Authority may at any stage refer any recommendation made by the Bid
Evaluation Committee or the Bid Adjudication Committee back to that committee for
reconsideration.
15.5.8 The Bid Adjudication Committee must also consider and rule on all recommendations /
reports regarding the amendment, variation, extension, cancellation or transfer of contracts
awarded.
15.5.9 The BAC is restricted to adjudicating whether the process of procurement was fair, equitable,
transparent, competitive and cost effective.
15.5.10 The BAC must:
15.5.10.1 Reject a Bid from a service provider who fails to provide written proof from the
South African Revenue Service (SARS) that the service provider either has no
outstanding tax obligations or has made arrangements to meet outstanding tax
obligations.
15.5.10.2 Reject a recommendation for the award of a contract if the recommended Bidder
has committed a corrupt or fraudulent act in competing for the particular contract.
15.5.10.3 Cancel a contract awarded to a service provider of goods or services if:
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15.5.10.3.1 The service provider committed any corrupt or fraudulent
act during the bidding process or the execution of that
contract ; or
15.5.10.3.2 Any official or other role player committed any corrupt or
fraudulent act during the bidding process or the execution of
that contract that benefited that service provider.
15.5.11 The BAC may disregard the bid of any bidder if that bidder or any of its directors have:
15.5.11.1 Abused the institution’s SCM system
15.5.11.2 Committed fraud or any other improper conduct in relation to the SCM system
15.5.11.3 Failed to perform on any previous contract.
16. Deviations to Normal Procurement Procedures
16.1 Deviations to the normal procurement procedures refers to special services, cases of urgency
and emergency, cases where the invitation of Bids is not in the best interest of the NRCS.
16.2 The reasons for deviating from the normal procurement procedures must be recorded and
approved in accordance with the Delegations of Authority.
16.3 Special services are services such as specialist technology / expertise where limited
capacity in the market exists e.g. copyright or patents and investigations that require
specialized testing and expertise.
16.4 Urgent procurement is where early delivery is of critical importance and the invitations of
competitive Bids are either impossible or impractical.
16.5 Emergency procurement is due to imminent or transpired crises, disaster or tragedy,
immediate action is necessary in order to avoid a dangerous or risky situation, misery or want.
16.6 Applicable rules in the case of deviations.
16.6.1 Emergency or urgent procurement must not be used to circumvent normal
procurement procedures, as a result of insufficient stock-levels for items that are
used daily, as a result of poor or inadequate planning or as a result of
no/insufficient internal communication.
16.6.2 Ex post facto procurement may be approved in line with the delegations of
authority provided the procurement was in the best interest of the NRCS.
17. Contracts and Legal Services
17.1 Contracts
17.1.1 Contracts must be approved in terms of the DOA.
17.1.2 Prior to signing a formal contract or service level agreement with a contractor, NRCS must
ensure that such contracts or agreements are legally sound to avoid potential litigation and to
minimize possible fraud and corruption. This must include legal vetting by at least the Legal
Services of NRCS and applicable BU Head.
17.1.3 Such contracts or agreements must be actively managed in order to ensure that both the
NRCS and the contractors meet their respective obligations.
17.1.4 The procurement processes at SCM gives rise to the need for the formulation of formal
contracts to ensure the necessary protection of all rights and obligations between NRCS and
suppliers.
17.1.5 It is necessary to enter into a formal written contract for all SCM of goods and services
estimated in value over R 500 000 provided by suppliers where NRCS determines the
complexity and/or risk to be significant enough to warrant it.
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17.1.6 For purposes of this policy, a contract is an agreement between two or more competent
persons to perform or not to perform a specific act or acts.
17.1.7 A contract will be in writing. A purchase order containing NRCS pre-printed standard terms
and conditions, when accepted by a supplier, becomes a contract but a formal written
contract is necessary for values over R 500 000 as stated above.
17.1.8 An order should never be placed for values exceeding this amount without a contract except
where negotiations to finalize a contract is underway and where orders must be placed to
meet NRCS’s required delivery dates. If this is done, the terms and conditions of the
applicable Request for Bid (or Proposal) should be made to apply until the final contract is
executed.
17.1.9 Acceptance may be either in writing or by performance unless the purchase order requires
acceptance to be in writing. All agreements must be signed by the appropriate levels as
designated in the Delegation of Authority.
17.1.10 Contracts generally fall into two categories of types, either for products or services and they
are commitment or non-commitment, or any combination thereof.
17.1.11 All contracts should be captured on the accounting system and purchase order should also be
generated from the same system. All transactions should be initiated through generation of an
electronic purchase order.
17.1.12 The CFO may provide written authority to the SCM unit to negotiate a contract on behalf of
NRCS, in conjunction with the Legal Division.
17.2 Contract Administration
17.2.1 The SCM Unit must maintain a complete register of contracts.
17.2.2 The end-user must manage contracts and inform the Supply Chain Manager of any non-
performance or breach of contracts by the service providers.
17.2.3 Any contract variation must be approved as per the delegations of authority.
17.2.3.1 It is recognized that, in exceptional cases, NRCS may deem it necessary to
expand or vary orders against the original contract.
17.2.3.2 The absence of a prescribed threshold for the expansion or variation of orders
against the original contract has, however, led to gross abuse of the current SCM
system.
17.2.3.3 For transactions with an original value over R500 000, the BAC may expand
or vary any contract by not more than
17.2.3.3.1 20% or R20 million (including all applicable taxes) for construction
related goods, works and/or services and
17.2.3.3.2 15% or R15 million (including all applicable taxes) for all other goods
and/or services of the original value of the contract, whichever is the
lower amount.
17.2.3.4 For transactions with an original value of R500 000 or less, the CFO may
expand or vary any contract by not more than
17.2.3.4.1 20% for construction related goods, works and/or services and
17.2.3.4.2 15% for all other goods and/or services of the original value of the
contract, whichever is the lower amount.
17.2.3.5 Any deviation in excess of these thresholds must be approved by the CEO
17.2.3.5.1 Over 20% for construction related goods, works and/or services and
17.2.3.5.2 Over 15% for all other goods and/or services of the original value of
the contract, whichever is the lower amount.
17.2.3.5.3 The cases approved by the CEO should be exceptional, and
supported by thorough arguments and business cases from the
responsible BU.
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17.2.3.5.4 Once approval is provided, the NRCS must forward the approval
together with a motivation, as required by National Treasury to
National Treasury and the Auditor-General within 10 Days.
17.2.3.6 The contents of paragraph 17.2.3.3, 17.2.3.4, 17.2.3.5 are not applicable to
transversal term contracts facilitated by the relevant treasuries and specific term
contracts as in such contracts, orders are placed as and when commodities are
required and that at the time of awarding the contract, required quantities are not
known.
17.2.4 If a Service Provider fails to deliver any of or all of the goods or fails to perform services within
the period(s) specified in the contract, the NRCS shall, without prejudice to its other remedies
under the contract, deduct from the contract price as penalty, a sum calculated on the
delivered price of the delayed goods or unperformed services. The NRCS may also consider
termination of the contract.
17.2.5 Controls will be implemented to ensure that contracts are not extended to circumvent quote or
bid process
17.3 Legal Services
Legal Services should be involved when all contracts/memorandum of agreements are concluded.
18. Other considerations
18.1 Risk Management
18.1.1 All NRCS staff members involved in procurement must comply with the approved Risk
Management and Fraud Prevention Plan.
18.1.2 The Supply Chain Manager is responsible for setting up independent verification control
points within the SCM processes to mitigate risks.
18.1.3 Risks and rewards of ownership will only be transferred to the NRCS on acceptance, of the
assets or goods on the premises of the NRCS by a duly authorised NRCS official.
18.1.4 The responsibilities of reporting any known fraudulent or non-compliance activity will rest with
all NRCS officials.
18.1.5 The Supply Chain Manager must report on regularly to the CFO on the performance of SCM.
18.2 Training of SCM Officials
18.2.1 The CFO must ensure that officials implementing the NRCS’s supply chain management
system are trained and deployed in accordance with the requirements of the Framework for
Minimum Training and Deployment issued by the National Treasury.
18.3 Non-Compliance
18.3.1 NRCS officials must comply with the standard operating procedures issued in terms of this
policy.
18.3.2 Where an NRCS official is suspected of breaching the policy or allegation made against an
official, an internal investigation must be undertaken preferably by Internal Audit division and
depending on the outcome, internal, civil and/or criminal legal action may be instituted against
the employee. Conduct that may constitute an offence will be reported to the South African
Police Services.
18.3.3 Any disciplinary action arising from breach of this policy will be taken according to the
disciplinary code and grievance procedure of the NRCS.
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18.4 National Industrial Participation Programme (NIPP)
18.4.1 The NRCS must obtain clearance for a recommended bidder from the Department of Trade
and Industry, in respect of contracts which are subject to the National Industrial Participation
Program of that Department.
18.5 Reporting of Supply Chain Management Information
18.5.1 The CFO must submit to the relevant Treasury such supply chain management information as
that Treasury may require.
19. Compliance, Responsibilities and Accountabilities
19.1 SCM Official’s responsibilities
Each SCM official must: 19.1.1 Ensure that in any procurement related negotiation or evaluation, all participants are dealt
with fairly with all quotations and bids in a manner that reflects the ethical principles in the
code of conduct for SCM practitioners as contained in Practice Note SCM4 of 2003.
19.1.2 Comply with the code of conduct which obliges all officials to refuse gifts, hospitality, favors or
any other act that would materially compromise the credibility and integrity of the SCM
system.
19.1.3 Comply with the highest ethical standards in order to promote –
19.1.3.1 Mutual trust and respect; and
19.1.3.2 An environment where business can be conducted with integrity and in a fair and
reasonable manner
19.1.4 Adhere to The National Treasury’s Code of Conduct for Supply Chain Management
Practitioners
19.1.5 Sign the relevant Codes of Conduct with an undertaking to adhere to their requirements as
per National Treasury Practice Note No. 7 of 2009/2010. This includes newly appointed
officials or officials transferred to the SCM unit should also be required to sign the Codes of
Conduct.
19.1.6 Comply with the NRCS Code of Ethics, which acts as a guideline for ethical behavior.
19.1.7 Upon becoming aware of a breach of or failure to comply with any aspect of the supply chain
management system, must immediately report any the breach or failure to the Accounting
Authority, in writing.
19.2 Responsibilities of all employees, including SCM Officials
19.2.1 All employees must adhere to the SCM policies and procedures
19.2.2 All employees must recognize and disclose any conflict of interest that may arise;
19.2.2.1 Must treat all suppliers and potential suppliers equitably and fairly;
19.2.2.2 May not use their position for private gain or to improperly benefit another person;
19.2.2.3 Must ensure that they do not compromise the credibility or integrity of the supply
chain management system through the acceptance of gifts or hospitality or any
other act;
19.2.2.4 Must be scrupulous in their use of public property; and
19.2.2.5 Must assist CEO and Accounting Authority in combating corruption and fraud in
the supply chain management system.
19.2.2.6 Maintain the highest standards of honesty, integrity, impartiality, transparency
and objectivity.
19.2.2.7 Remain and appear to remain independent and at arms- length from any supplier.
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19.2.2.8 Act in such a manner that NRCS’ reputation is not compromised.
19.2.2.9 Avoid any conflict of interest.
19.2.3 If a NRCS supply chain management official or any other role player, or any close family
member, partner or associate of such official or other role player has any private or business
interest in any contract to be awarded, that official or other role player must –
19.2.3.1 Disclose that interest; and
19.2.3.2 Withdraw from participating in any manner whatsoever in the process relating to
that contract. In all cases of withdrawal, the proceedings must be documented.
19.2.4 All gifts received by NRCS employees or Board Members from suppliers, related to the
procurement activities, shall be declared with the CEO by signing the gift register.
19.2.5 A NRCS staff member who becomes aware of a breach of or failure to comply with any
aspect of the SCM system whether by employees or Board members, must immediately
report the breach or failure to the CFO, CEO and the Board in writing.
19.3 NRCS Management Responsibilities
19.3.1 Each manager is responsible for
19.3.1.1 Ensuring application of this policy in their respective business units / regions
19.3.1.2 Ensuring staff are aware of their responsibilities in terms of this policy
19.3.1.3 Reporting to or ensure the reporting to the SCM Manager (in the office of the
CFO) as required in terms of this policy
19.3.1.4 Ensuring procurement for their business unit is in line with this policy, and all
other financial and non-financial policies.
19.3.2 NRCS Management must take all reasonable steps to prevent abuse of the SCM system, and
investigate any allegations against an NRCS staff member or other role player involved in
corruption, improper conduct or failure to comply with the SCM.
19.3.3 When justified, the Management must:
19.3.3.1 Take steps against such NRCS staff member or other role player;
19.3.3.2 Reject a recommendation for the award of a contract if the recommended bidder
has committed a corrupt or fraudulent act in competing for the particular contract;
or
19.3.3.3 Cancel a contract awarded to a supplier of goods or services if found that the
contractor:
19.3.3.4 Committed any corrupt or fraudulent act during the bidding process or the
execution of that contract; or
19.3.3.5 Any NRCS staff member or other role player committed any corrupt or fraudulent
act during the bidding process or the execution of that contract that benefited that
supplier.
19.3.4 Staff that transgress the SCM process could be charged with criminal charges when found
guilty and a case at the South African Police Services will be opened where fraud is involved.
19.4 Finance Department’s responsibilities
The Finance department is responsible:
19.4.1 For maintaining the SCM policy and related forms
19.4.2 Maintaining the a system of SCM for NRCS
19.4.3 Implementing controls in respect of NRCS SCM
19.4.4 Convening committees required to ensure effective SCM
19.4.5 Report to the CEO any contraventions of this policy
19.4.6 Reporting to National Treasury, the AG, the Board and the ARC, any information as required
in terms of SCM.
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SECTION 3: SCM PROCEDURES
20. SCM transaction principles
20.1 NRCS Financial Thresholds
20.1.1 Transaction values up to R2 000
20.1.1.1 One verbal or written quote will be sufficient
20.1.1.2 In the event Petty cash is utilised to pay for the transaction, the Bank and Cash policy
must be adhered to.
20.1.1.3 Suppliers should be registered on the list of prospective suppliers. Exceptions may
exist in terms of para. 20.2
20.1.2 Transaction values over R2 000 up to R 10 000
20.1.2.1 At least three (3) verbal or written quotations must be obtained.
20.1.2.2 Where possible quotes should be from the list of prospective suppliers
20.1.2.3 An official order must be placed against a written confirmation from the selected
supplier if the quotation was submitted verbally
20.1.2.4 Suppliers should be registered on the list of prospective suppliers. Exceptions may
exist in terms of para. 20.2
20.1.3 Transaction values over R 10 000 up to R 30 000
20.1.3.1 At least three (3) written quotations must be obtained from as many suppliers as
possible
20.1.3.2 Suppliers should be registered on the list of prospective suppliers, exceptions may
however exist.
20.1.3.3 An official order must be placed against a written confirmation from the selected
supplier.
20.1.4 Transaction values over R 30 000 up to R 500 000
20.1.4.1 Invite and accept written price quotations for requirements up to an estimated value
of R500 000 from as many suppliers as possible,
20.1.4.2 Suppliers should be registered on the list of prospective suppliers.
20.1.4.3 The 80/20 preference point system is applicable to bids with Rand value equal to, or
above R30 000 and up to a Rand value of R1 million (all applicable taxes included).
20.1.4.4 No tender may be awarded to any person whose tax matters have not been declared
by the South African Revenue Services to be in order.
20.1.4.5 A valid Tax clearance certificate must be attached.
20.2 Exceptions iro quotations and RFQ’s
20.2.1 Where no suitable suppliers are available from the list of prospective suppliers, written price
quotations may be obtained from other possible suppliers.
20.2.2 If it is not possible to obtain at least three written price quotations, the reasons should be
recorded and approved by the CFO.
20.2.3 Where the market or the service is highly specialized it may be appropriate to confine
quotations to known vendors.
20.2.4 For instances where this limited source approach is applied, the NRCS staff member
requesting this process must document the reasons for it and how the process to fulfill the
requirements will not affect open and effective competition.
20.3 Goods and Services above the transaction value of R 500 000 (VAT Included)
20.3.1 The NRCS must invite competitive bids for all procurement above R 500 000.
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20.3.2 Competitive bids should be advertised in at least the Government Tender Bulletin and in other
appropriate media should NRCS deem it necessary to ensure greater exposure to potential
bidders. The responsibility for advertisement costs will be that of NRCS.
20.3.3 Should it be impractical to invite competitive bids for specific procurement, e.g. in urgent or
emergency cases or in case of sole supplier, the NRCS may procure the required goods or
services by other means, such as price quotations or negotiations in accordance with
Treasury Regulation 16A.
20.3.3.1 The reasons for deviating from inviting competitive bids should be recorded and
approved by the CEO.
20.3.3.2 The NRCS is required to report within ten working days to the relevant treasury and
the Auditor-General all cases where goods and services above the value of R1
million (VAT inclusive) were procured in terms of Treasury Regulation 16A 6.4. The
report must include the description of goods or services, the name/s of the supplier/s,
the amount/s involved and the reasons for dispensing with the prescribed competitive
bidding process.
20.3.4 Goods, works or services may not deliberately be split into parts or items of lesser value
merely for the sake of procuring the goods, works or services otherwise than through the
prescribed procurement process. When determining transaction values, a requirement for
goods, works or services consisting of different parts or items must as far as possible be
treated and dealt with as a single transaction.
20.3.5 The 90/10 preference point system is applicable to bids with a Rand value above R1 million
(all applicable taxes included).
20.3.6 Refer to paragraph 21 (below) for instances where functionality is a criteria.
20.3.7 A valid Tax clearance certificate must be attached.
21. Bids based on functionality as a criterion
21.1 In general, not all bids should be invited on the basis of functionality as a criterion. The need
to invite bids on the basis of functionality as a criterion depends on the nature of the required
commodity or service taking into account quality, reliability, viability and durability of a service
and the bidders’ technical capacity to execute the contract.
21.2 For goods and services exceeding R500 000 competitive bids must be invited, unless written
approval to do otherwise is obtained and PPPFA 80/20 principle must be applied and
functionality evaluation criterion may be considered.
21.3 For goods and services exceeding R1 million and above, competitive bids must be invited,
unless written approval to do otherwise is obtained and PPPFA 90/10 principle must be
applied and functionality evaluation criterion may be considered.
21.4 Valid Tax clearance certificate must be attached.
21.5 When NRCS invites a bid that will also be evaluated on the basis of functionality as a
criterion, the NRCS must clearly specify the following aspects in the bid document
Functionality
dimensions
Details
Evaluation
criteria for
measuring
functionality
The evaluation criteria may include criteria such as the consultant’s
relevant experience for the assignment, the quality of the methodology;
the qualifications of key personnel; transfer of knowledge etc.
Weight of each
criterion
The weight that is allocated to each criterion should not be generic but
should be determined separately for each bid on a case by case basis.
Applicable The applicable values that will be utilized when scoring each criterion
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Functionality
dimensions
Details
value should be objective. As a guide, values ranging from 1 being poor, 2
being average, 3 being good; 4 being very good and 5 being excellent,
may be utilized.
Minimum
qualifying
score for
functionality
The minimum qualifying score that must be obtained for functionality in
order for a bid to be considered further should not be generic. It should
be determined separately for each bid on a case by case basis. The
minimum qualifying score must not be prescribed so low that it may
jeopardise the quality of the service required nor so high that it may be
restrictive to the extent that it jeopardizes the fairness of the SCM system
22. NRCS Suppliers
22.1 Registration of suppliers on the accounting system
22.1.1 Suppliers standing data form (AA135) must be completed for all new suppliers.
22.1.2 The minimum supporting documentation that needs to accompany the completed registration
form is:
22.1.2.1 Valid and original Tax Clearance Certificate issued by SARS.
22.1.2.2 Proof of company registration or ownership
22.1.2.3 Completed EFT form (AA138) confirming bank details and indemnifying the NRCS
from paying the supplier in the bank account provided.
22.1.2.4 Proof of existence of bank account in the exact name of the trading entity or
registered company (i.e. cancelled cheque, original deposit slip or EFT form stamped
by bank).
22.1.2.5 Valid and original B-BBEE Status Level Verification Certificate or a certified copy
thereof
22.1.2.6 Completion and submission of Standard Bidding Document 4 Declaration of Interest.
22.1.3 SCM unit must ensure that the B-BBEE Status Level of Verification Certificates submitted are
issued by the following agencies:
B-BBEE Status Agencies
Bidders other than
EMEs
Verification agencies accredited by SANAS; or
Registered auditors approved by IRBA
Bidders who qualify
as EMEs
Accounting officers as contemplated in the CCA; or
Verification agencies accredited by SANAS; or
Registered auditors. (Registered auditors do not need to meet the
prerequisite for IRBA’s approval for the purpose of conducting verification
and issuing EMEs with B-BBEE Status Level Certificates).
22.2 Establishment of supplier database
22.2.1 The SCM Manager should compile a list of prospective suppliers to be used for the
procurement requirements. This list should be used effectively to promote Black Economic
Empowerment through the participation of black owned enterprises (as defined in the
Strategy for Broad-Based Black Economic Empowerment issued by the Department of Trade
and Industry) as well as the promotion of businesses owned by other Historically
Disadvantaged Individuals (HDIs).
22.2.2 The NRCS should at least once a year, through local representative newspapers or by any
other means, invite prospective suppliers to apply for evaluation and listing as prospective
suppliers. The list should be updated on an ongoing basis in order to accommodate especially
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newly established black owned and empowered businesses and other newly established HDI
suppliers.
22.2.3 Once a list has been compiled per commodity and type of service, price quotations should be
invited there from. The invitation of price quotations from the compiled list of prospective
suppliers per commodity or service should be done on a rotation basis in such a manner that
ongoing competition amongst suppliers is promoted. Prospective suppliers must be allowed to
submit applications for listing at any time.
23. Pre SCM Process
23.1 Process preceding the SCM process
23.2 Process preceding the SCM process
23.2.1 Business units must identify the need for goods or services
23.2.2 These needs, if over R 500 000 must be included in the demand management plan for the
year.
23.2.3 All procurement needs for a financial year must also be included in the budget for the
respective business units.
23.2.4 Where a procurement request is not included in the demand management plan or the budget,
and there is a genuine need for the goods / services, the CEO / CFO / the Board may
approve such request in line with the DOA.
23.2.5 Business units must submit the following to the SCM section for the procurement process to
proceed:
23.2.5.1 Final approved business cases for all transactions with estimated costs of R30 000 or
over.
Business unit need identified
Inclusion in strategy / business plan
Estimated cost of goods / services over R500 000
Include in demand management plan (Tender process)
Inclusion on budget
Transaction R30 000 and over
Prepare business case / detailed motivation and Requisition
Yes
No RFQ Process
Prepare requisition and specifications as required
Yes
No Establish funding
requirements (with CFO)
Establish timing of procurement (with CFO)
No
Yes
Yes
No
Approval by line manager
Approval by line manager
Approval in terms of DOA
Approval ito DOA
Submit to SCM for procurement of goods / services – Proceed to
RFQ / Tender process
Yes
Yes
Yes
Yes
Reassess procurement request
No
No
No
No
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23.2.5.2 Completed and approved requisitions for all other transactions.
23.2.6 The SCM unit shall only process requests which are:
23.2.6.1 Approved by the relevant line manager.
23.2.6.2 Accompanied by sufficient supporting documents in the case of technical
specifications.
23.2.6.3 Complete.
23.2.6.4 Adequate to ensure a transparent and fair procurement process.
23.2.7 If upon assessment of the specifications / terms of reference, the SCM unit finds that they are
insufficient, the SCM unit may request business units to redo the specifications.
24. Obtaining of quotes / RFQ Process
The RFQ process is followed for all transactions under R500 000.00
24.1 Process flow for RFQ process
Request for service/ goods under R500 000 from Business Unit to SCM
Search database for suppliers
Adequate number of suppliers
Obtain quotes
Required number of quotes obtained
Evaluate quotes and Generate Purchase Requisition (PR)
PR Approved
Generate Purchase order (PO)
Issue letter of award / PO / enter contract negotiations
Yes
No Search market / engage end-user for suppliers
Update database of suppliers with additions
Yes
No Obtain approval ito DOA / Workflow
Quotes not applicable N/A
BU
Responsibility
SCM
Responsibility
Yes
Yes
No
Yes
BU
Responsibility
SCM
Responsibility
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24.2 Obtaining quotes for RFQ
24.2.1 The Procurement Officer will endeavor to obtain quotes from the list of approved suppliers.
24.2.2 If the number of currently approved suppliers is less than three, or if the number of quoting
suppliers should be extended, the procurement officer may extend the invitation to quote to
other suppliers.
24.2.3 Where an invitation to quote has been extended to a supplier which is not a vendor on the
accounting system, the procurement officer will ensure that the vendor is procedurally
engaged, approved and loaded on the accounting system.
24.2.4 Where the required number of suppliers are engaged, but the minimum number of quotes are
not obtained, the CFO and CEO shall approve for transactions lower than R500 000, and
transactions R500 000 and over, respectively, in terms of the DOA.
24.3 Quotes not required
24.3.1 Three quotes will not be required under the following circumstances:
24.3.1.1 If goods and services are sourced from a supplier in terms of a written contractual
agreement, within the contractual amounts (if applicable);
24.3.1.2 In the case of an MOU or agreement in terms of National Treasury requirements
24.3.1.3 Subscriptions and /or memberships with professional bodies;
24.3.1.4 Training where such training is not provided by the general market;
24.3.1.5 Conferences and seminars;
24.3.1.6 Repayment of travel expenditure to customers and refunds to employees;
24.3.1.7 Emergency expenses; and
24.3.1.8 Quotes are not required for statutory services for example municipal accounts etc.
24.3.2 If there are exceptional circumstances and the exception is motivated in writing and approved
in terms of the Delegation of Authority.
24.4 Issuing of Requisitions
24.4.1 Upon receiving the quotes from the suppliers, the procurement officer and/or evaluation
committee will evaluate and recommend the successful supplier on the basis of the best
balance of:
24.4.1.1 Price
24.4.1.2 Quality
24.4.1.3 BBBEE score
24.4.1.4 Delivery lead time
24.4.2 Requisitions are raised by the administrator in the business unit and approved by the
business unit manager on the accounting system. Dependent on the value, approval may be
required at higher levels in accordance with the Delegation of Authority.
24.4.3 The SCM unit shall only action requisitions that have been approved by line management in
terms of the Delegation of Authority on the accounting system.
24.4.4 Thorough documentation for emergency purchases should be prepared by line management
and approved or ratified by the relevant Executive.
24.5 Orders
24.5.1 The procurement officer will create a requisition on the accounting system which will route the
purchase requisition to appropriate manager for approval.
24.5.1.1 Quoted specifications and/or goods and services.
24.5.1.2 Actual promised delivery date.
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24.5.2 Once the approval has been actioned on the system, the requisition will be sent to the SCM
unit for conversion to an order. The purchase order will be sent through to successful
suppliers via fax or e-mail.
24.5.3 All purchase orders and supporting documentation will be filed by the SCM unit.
24.6 GRV and Payments
When goods or services are received, a GRV will be issued on the system by Finance or the Business
Unit.
After GRV, the documents are forwarded to accounts payable for payment.
25. The Bid / Tender Process
The bid / tender process is followed for all transactions above R500 000.00
25.1 Process flow for bid / tender process
Request for service/ goods above R500 000 from Business Unit to SCM
Convene Bid Specification Committee (BSC)
Prepare Bid Specifications in compliance with policy
Advertisement of Bid / Tender
Convene Bid Evaluation Committee (BEC)
Evaluate tenders and preparation of report recommending award
Submissions prepared for approval of award
Approval in terms of Delegation of Authority
Issue letter of award / enter contract negotiations
No
Yes
Business unit to re-assess submissions / specifications
Approval by Bid Adjudication Committee (BAC)
Final award recommended
Yes No
Approval / Award by Bid Adjudication Committee (BAC)
Yes
Reasons / guidance provided
No
Alternative award proposed No
Yes
Alternative award ratified by CEO
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25.2 Bid Adjudication Committee
25.2.1 The Supply Chain Management functions are overseen by a Bid Adjudication Committee of
NRCS, as established by the CEO and consists of the following:
25.2.1.1 Chief Financial Officer (chairperson)
25.2.1.2 SCM Manager
25.2.1.3 3 BU managers
25.2.1.4 Legal / contract specialist
25.2.2 The Bid Adjudication Committee will meet on an ad hoc basis where, for reasons of urgency,
adjudication and recommendation need to be made on an urgent basis. All decisions taken by
the Bid Adjudication Committee must be recorded in writing and be retained by the CFO for
record purposes.
25.2.3 The Bid Adjudication Committee will be responsible for adjudication of bids exceeding
R500 000.
25.3 User requirements and Business Case /motivations
25.3.1 The business case or motivation and the requisition must set out all the detail with regard to
the required goods or services.
25.3.2 In this regard, the end-user must draw up a motivation as to why NRCS requires the goods or
services, and an estimate of the value, costs thereof and risks if any.
25.3.3 A compiled business case/ motivation must be approved by the relevant BU head. Where the
service / goods being requested also require input / support from another business unit, the
head of that business unit / the relevant supervisor must also approve the request.
25.3.4 At this stage, the relevant BU Head must forward the request to Procurement, who will
determine the need for a Bid Specification Committee and Bid Evaluation Committee for
approval by the CFO.
25.3.5 Once the appropriate Executive has approved the business case, it must be submitted to the
Management Accounting / Budget office within the Finance Department will conduct a budget
check to ensure the availability of funds for the required acquisition.
25.3.6 In the event that funds are not available, The BU Head must consult with the CFO, prior to
finalizing the business case.
25.4 Specification of goods/works or services
25.4.1 Specifications must be written broadly enough to encourage competition. The specifications
must not be so narrow that only specific products can comply, nor may it be drafted around a
specific brand. If only a specific brand or trademark will fulfill the requirement, this factor must
be submitted with full motivations to the appropriate approval in terms of a Deviation.
25.4.2 This process must precede the invitation of bids as it constitutes a limited bid approach.
25.4.3 However specifying a particular brand is acceptable in cases where existing equipment is
involved and the item comprises a component thereof, which must be of the same brand.
25.4.4 The requirement however must be given the necessary exposure i.e. bids must be invited and
the requirement must advertised in the Government Tender Bulletin. In all cases no specific
brand names may be specified.
25.4.5 Standards and technical specifications quoted in bidding documents should promote the
broadest possible competition, while assuring that critical elements of performance or other
requirements for the goods, services and/or works being procured are achieved.
25.4.6 It is recommended that as far as possible, the institution should specify accepted standards
such as those issued by Standards South Africa (the division of the South African Bureau of
Standards), the International Standards Organization or an authority recognized by the South
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African National Accreditation System (SANAS) with which the equipment or materials or
workmanship should comply.
25.4.7 Specifications should be based on relevant characteristics and/or performance requirements.
References to brand names, catalogue numbers, or similar classifications should be avoided.
If it is necessary to quote a brand name or catalogue number of a particular manufacturer to
clarify an otherwise incomplete specification, the words "or equivalent “should be added after
such reference.
25.4.8 The specification should permit the acceptance of offers for goods which have similar
characteristics and which provide performance at least equivalent to those specified. The
quality of goods/services required should, however, not be over specified to the extent that it
will be impossible for others to offer such a product
25.5 The RFB Process
In the bid process all prospective vendors compete on the same terms and without knowledge of their
competitors’ bids. Competitiveness must be maintained throughout the process and all stages of the
process must be conducted in an open, transparent, fair, equitable and competitive manner.
This means ensuring that:
25.5.1 All vendors are given the opportunity to submit a bid on the same terms;
25.5.2 Information provided to prospective bidders is not deceptive or misleading; and
25.5.3 The conditions and protocols published in the bid request are adhered to particularly when
evaluating bids.
25.6 Planning an RFB
25.6.1 After budget approval, the end-user must consider the criteria, weightings and preference
point system against which the bidders will be evaluated. These must be inserted in the RFB.
25.6.2 After review and approval of the business case / motivations, the appropriate BU Head must
assist the end-user to draft the RFB.
25.6.3 The RFB may where necessary be submitted to the BSC for review and approval. The
appropriate BU Head must therefore let the RFB circulate amongst BSC members, and where
necessary have the BSC convened on a specific date, at which meeting the BSC members
will perform a quality review on the RFB and, if satisfied, approve the document.
25.6.4 When performing a quality review on the RFB, the BSC must consider the above-mentioned
factors, and it must ensure that the RFB comprises the following:
25.6.4.1 Clearly defined needs that gives enough information to the prospective bidders to
understand the specifications;
25.6.4.2 Criteria and weights against which all bids will be evaluated;
25.6.4.3 Criteria which are mandatory to comply with and the ones that are desirable;
25.6.4.4 A clear indication that failure to comply with mandatory requirements will be
regarded as non-responsive responses and will result in them being disqualified;
25.6.4.5 Details of the bid evaluation procedure that will be used;
25.6.4.6 RDP / Participation Goals/ Preferential procurement forms;
25.6.4.7 Special conditions (if any);
25.6.4.8 Publication information (closing date, information session, etc.);
25.6.4.9 NRCS bid template has been used; and
25.6.4.10 An RFB process needs to be planned carefully to ensure favorable outcomes.
25.6.5 Where appropriate, the following are steps that must be included:
25.6.5.1 Specifying the needs including the evaluation criteria, this will include (gathering
information from all relevant stakeholders);
25.6.5.2 Developing a project plan;
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25.6.5.3 Conducting a benchmark;
25.6.5.4 Conducting the market / supplier research to establish its competitiveness and
identify suitable sources of supply;
25.6.5.5 Determining the strategic sourcing method;
25.6.5.6 Developing a bid evaluation and adjudication plan (nomination of bid evaluation
committee);
25.6.5.7 Planning for negotiation; and
25.6.5.8 Determining the objectives to be included in the bid invitation in terms of the
PPPFA.
25.6.6 Evaluation criteria must be fair and acceptable.
25.7 Preparing the Bid Documents
25.7.1 Good planning will simplify the drafting of the RFB documentation. Bid invitation must be clear
and concise as possible and avoid imposing unnecessary cost and effort on bidders. Care
must be taken not to specify unnecessary restrictive conditions, which will cause bidders to
load their prices. A bid documentation which is well-planned will afford all vendors an
opportunity to prepare excellent proposals, which would yield a magnificent procurement
outcome.
25.7.2 The bid invitation must determine the manner in which to best obtain the goods/services. All
applicable conditions must be communicated to all vendors in writing by using NRCS
standard RFB template.
25.7.3 NRCS’ standard RFB forms have been aligned with the standard bidding documents (SBDs)
prescribed by the National Treasury in terms of SCM Circular dated 01 December 2011:
Implementation guide: Preferential Procurement Regulations, 2011 and General Conditions of
Contract (GCC). See Treasury Regulation.
25.8 Publication of Bids
25.8.1 All NRCS bids shall be advertised for a minimum of 21 calendar days before closure from the
day of publication. Unless specified to the contrary or adequately motivated for a shorter
period and approval has been granted by the CEO or his/her delegate bids can be advertised
for a shorter period. When determining the closing date of the bids sufficient time must be
allowed for prospective bidders to prepare and submit their bids. Circumstances may exist
where the preparation of the bid submission is complex, in such cases it is advisable that a
longer period is determined for the submission of bids. However this must be properly
motivated and approved by the CEO or his/her delegate.
25.8.2 All NRCS bids shall at least be advertised in the Government Tender Bulletin, on NRCS’ web
site (www.nrcs.org.za) and where applicable, in any other media deemed necessary to
ensure maximum exposure of the required goods / services.
25.9 Information Meetings or Site Inspections
25.9.1 Should the user deem it necessary to invite prospective bidders to attend an information
meeting or a site inspection, whether such a requirement is compulsory or not, then this
requirement must be advertised and be indicated in the Government Tender Bulletin, NRCS
website and any other media used to advertise the bid.
25.9.2 Particulars of the venue, date and time of the information meetings and site inspection must
be clearly indicated in the bid invitation and in the bid advertisement. Should the information
meeting or the site inspection be compulsory it must be explicitly stated in the advertisement
and the bid document that failure to attend will results in automatic disqualification of the
bidder’s responses or proposals.
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25.9.3 All vendors shall be required to sign an attendance register to confirm their attendance and
minutes shall be taken. Minutes must set out the question asked, the answers provided and
decisions made. Those minutes must be made available to all interested parties.
25.10 Communicating with Prospective Bidders
25.10.1 There should be minimal contact with prospective bidders prior to the closing date of bids. All
communications with prospective bidders must be done in consultation with the BU head. All
clarifications regarding the bid document must be provided in a consistent manner in order to
ensure that all vendors have access to the same information and no one is advantaged or
disadvantaged. Such clarification shall be in writing, and may be posted on NRCS’ website
and will be filed in the relevant bid file.
25.10.2 Any NRCS staff member who contravenes the above shall face disciplinary action.
25.11 Changing of Information
After the RFB has been advertised, but prior to the closing date and time, the relevant division may in
the event of grave mistakes and changes required in the RFB document request the CEO or his/her
delegate’s approval for the following:
25.11.1 To cancel an RFB an invite new bids;
25.11.2 To amend the bid and issue such amendments; and
25.11.3 To extend the closing date of the RFB.
25.12 Submission of Bids
25.12.1 The full and correct physical address where bids are to be lodged or the postal address of the
place where bids must be posted to must be explicitly indicated in the bid invitation document.
All bids shall be lodged at the NRCS offices situated at:
SABS Campus
1 Dr Lategan Road
Groenkloof
Pretoria
25.12.2 Failure to comply with this requirement will result in bids being treated as “late bids” and will
not be entertained. Such bids will be returned to the respective bidders.
25.12.3 No bid shall be accepted by NRCS if submitted in any manner other than as prescribed
above.
25.13 Closing Date of Bids
25.13.1 All bids shall close at NRCS’ offices at the date and time stipulated in the bid document. In the
interest of good governance, maintaining the integrity of the bidding process, as well as
maintaining the confidence of the bidders, it is critical that a cut-off time be set for submitting
bids which must be rigorously respected.
25.13.2 The bid closing date and time will be strictly monitored by SCM and the appropriate BU Head.
The bid responses will be sealed removed and locked away by SCM and the appropriate BU
Head once a closing date and time has expired. The bid responses must be kept safely until
the evaluation takes place.
25.13.3 Publication of names of bidders in respect of advertised competitive bids (above the threshold
value of R500 000 all applicable taxes included)
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25.13.4 Within ten (10) working days after the closure of any advertised competitive bid, NRCS must
publish on its website the names of all bidders that submitted bids in relation to that particular
advertisement. Where practical, NRCS must also publish the total price and the preferences
claimed by the respective bidders. The information should remain on the website for at least
thirty (30) days.
25.14 Validity Period of Bids
25.14.1 NRCS’ norm is a validity period of not more than one hundred and eighty (180) days. Any
period longer than this stipulated period must be motivated and be approved by the CEO or
his/her delegate. The appropriate Executive shall be responsible for the extension of all
validity periods of bids.
25.14.2 The period for which offers are to remain valid and binding must be indicated in the bid
document and be calculated from the closing time on the understanding that offers are to
remain in force and binding until the close of business on the last day of the period calculated.
If this day falls on a Saturday, Sunday or Public Holiday, the bids are to remain valid and
binding until the close of business on the following working day.
25.15 Opening and Screening of Bids
25.15.1 The names and designation of the NRCS staff members responsible for opening and
recording the bids must be recorded. The number of bids received shall be counted and noted
on a register that is kept for the specific bid. Details of each bidder must be entered into this
register.
25.15.2 All bid responses received shall be dated, stamped, with a time recorded, as proof that the bid
was received no later than the closing date and time. The register for the receipt of the bid
responses must be placed on the bid file for record and audit purposes. NRCS personnel
involved in this process must sign this register indicating their names and designations.
25.15.3 All bids will be screened in order to ensure that they have submitted the mandatory
documents as stipulated in the bid documentation. All bidders that fail to submit the
mandatory documents will be disqualified.
25.16 Late Bids
25.16.1 Bid responses are “late” if they are received at the address indicated in the bid document after
the closing date and time. In order to maintain the integrity of NRCS’ SCM system, it is
essential that a definitive cut-off time is set for submitting bids, and same must be strictly
observed. No late bids may be considered for evaluation. Such responses must be sent back
to the bidder with an explanation.
25.16.2 Bids received late will be kept separate and will be marked as received late with the date and
time that they were received.
25.17 Consideration of Bids
25.17.1 Clarification of Responses If required by the Bid Evaluation Committee (BEC), a clarification session may be held with all bidders
that submitted responses.
25.17.2 Cancellation and Re-invitation of Bids
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In the application of the 80/20 preference point system, if all bids received exceed R1 000 000, the bid
must be cancelled. If one or more of the acceptable bid(s) received are within the R1 000 000
threshold, all bids received must be evaluated on the 80/20 preference point system.
In the application of the 90/10 preference point system, if all bids received are equal to or below R1
000 000, the bid must be cancelled. If one or more of the acceptable bid(s) received are above the R1
000 000 threshold, all bids received must be evaluated on the 90/10 preference point system.
If a bid was cancelled in terms of the above paragraphs, the correct preference point system must be
stipulated in the bid documents of the re-invited bid.
The NRCS may, prior to the award of a bid, cancel the bid if:
Due to changed circumstances, there is no longer a need for the services, works or goods
requested. The NRCS must ensure that only goods, services or works that are required to fulfill
the needs of the institution are procured; or
Funds are no longer available to cover the total envisaged expenditure. The NRCS must ensure
that the budgetary provisions exist; or
No acceptable bids are received. If all bids are rejected, the institution must review the reasons
justifying the rejection and consider making revisions to the specific conditions of contract, design
and specifications, scope of the contract, or a combination of these, before inviting new bids.
25.18 Other matters iro Bids
25.18.1 A bidder who wishes to withdraw his / her bid before the expiry of the bid lapses and before a
letter of acceptance has been issued by NRCS, that vendor cannot be forced to execute the
contract.
25.18.2 No amendment of a bid price will be allowed during the validity period of the bid.
25.18.3 If it happens that due to unforeseen circumstances changes occur for which provision was not
made for in the bid, and subsequently bidders’ conditions change, bidders may request to
effect changes when extending the validity of their bids.
25.18.4 Bidders may not qualify any of the conditions that have been set out in the RFB with their own
conditions. A bidder’s own conditions may be rejected as being invalid, and failure by the
bidder to renounce such conditions when called upon to do so, may invalidate the bid.
Disqualification must be done by the BEC. The final decision as to disqualification lies with the
BAC.
25.19 SARS Tax Clearance Certificate
25.19.1 It is an absolute requirement that the taxes of the successful bidder are in order, or that
suitable arrangements have been made with the South African Revenue Services (SARS) to
satisfy such taxes.
25.19.2 No bid may be awarded to any bidder whose tax matters have not been declared by the
SARS to be in order. Copies of certificates, whether certified as a true copy of the original or
not, may not be accepted.
25.19.3 An original Tax Clearance certificate must be submitted at the time of the bid
25.20 Evaluation of Bids
25.20.1 The evaluation methodology to be applied in the evaluation of bids must be clearly explained
in the bid invitation. The following evaluation principles shall apply to the evaluation of all bids:
25.20.1.1 All bids that were duly lodged and have passed the screening phase must be
evaluated against the predetermined criteria, weightings, preference point
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systems and compliance with the general terms and conditions set out in the
RFB;
25.20.1.2 Documentary proof may be called for during and after the adjudication process
where doubt exists regarding any of the statements made in support of
preferences claimed;
25.20.1.3 Quality and value for money must be the prime considerations at all times, that is
total cost of ownership and life cycle costing, all decisions and reasons for these
must be recorded.
25.20.2 The appropriate Executive must ensure that the technical evaluation is not used to put
forward the supplier or product preferences of either user or evaluator, or to justify the bid
documentation specification, but purely reflects the technical merits of the bid compared to
the bid documentation.
25.21 Evaluation Phases
25.21.1 Phase 1: Mandatory Specification Evaluation This is the phase where bid responses are checked for compliance with bid mandatory
specifications/requirements i.e. technical or solution. All lodged bids that have passed the mandatory
screening phase must be evaluated to determine their compliance with technical or solution
mandatory requirements and conditions. All bids that does not comply with the technical or solution
mandatory requirements and not acceptable to the BEC should be eliminated and be disqualified for
further evaluations.
25.21.2 Phase 2: Financial Evaluation The remainder of the bids will therefore be brought to a comparative price basis deducting
preferences and adding implied contract price adjustments as well as repetitive costing (such as
maintenance). Total cost of ownership and life cycle costing are conducted at this stage.
25.21.3 Phase 3: Awarding of Points All points’ calculations must be done in accordance with the prescriptions of the PPPFA and SCM
regulations.
The PPPFA prescribes that the lowest acceptable bid will score 80 or 90 points for price. Bidders that
quoted higher prices will score lower points for price on pro-rata basis.
The formulae to be utilized in calculating points scored for price are as follows:
80/20 Preference point system (for acquisition of services, works or goods up to Rand value of R1
million including all applicable taxes)
Ps = 80 * (1 – (Comparative price of bid under consideration – Comparative price of lowest
acceptable bid or offer) / Comparative price of lowest acceptable bid or offer)
90/10 Preference point system (for acquisition of services, works or goods with a Rand value above
R1 million including all applicable taxes)
Ps = 90 * (1 – (Comparative price of bid under consideration – Comparative price of lowest
acceptable bid or offer) / Comparative price of lowest acceptable bid or offer)
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Points scored must be rounded off to the nearest 2 decimal places.
25.21.4 Phase 4: Calculation of points for B-BBEE status level of contributor
Points must be awarded to a bidder for attaining the B-BBEE status level of contribution in
accordance with the table below:
B-BBEE Status Level of
Contributor
Number of points
(90/10 system)
Number of points
(80/20 system)
1 10 20
2 9 18
3 8 16
4 5 12
5 4 8
6 3 6
7 2 4
8 1 2
Non-compliant contributor 0 0
A bid must not be disqualified from the bidding process if the bidder does not submit a certificate
substantiating the B-BBEE status level of contribution or is a non-compliant contributor. Such a bidder
will score zero (0) out of a maximum of 10 or 20 points respectively for B-BBEE.
25.21.5 Phase 5: Company Profile
Bidders must be requested to provide their company profiles with the bids. The information provided
cannot be used for point’s evaluation processes but to assess and confirm the companies’ status. The
following information must be contained in their profiles:
Mandatory
information
Details
Company Information Date established, names of directors and affiliate to groups
Bidder Operating
Organisation
Provide an overview of the operating structure and geographical locations of
the firm at the national, regional, and local levels
Standards Include information regarding your firm’s utilisation of widely known Industry
standards and guidelines, as they apply to your firm, your firm’s Bid and
proposed solution
Company Contact(s)
details
Provide the name, title, street address, city, province, telephone and fax
numbers and e-mail of the primary company’s contact person, and for any
Sub-Contractors
Corporate Financial
Status
Audited financial statements from the most recent fiscal year
List of all personnel
(when applicable)
List of all personnel to be assigned to the project by the supplier identifying
their qualifications to perform tasks/functions
25.21.6 Phase 6: Approval of Bids
After the BEC has evaluated the bids against the predetermined criteria, it will approve the preferred
bidder. The approval will be contained in a report, which sets out the following:
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a. The decision required; such as the name and price of the recommended bidder;
b. Bid background / information such as date of advert, media in which the bid was advertised;
c. All the bid responses that were received;
d. Those that were disqualified, both at the screening and the evaluation phase together with the
reasons why (including those that were late);
e. The responses that were evaluated;
f. Evaluation criteria and weightings, and each bidder’s scores against it; and
g. The recommended or the preferred bidder and a motivation for it.
A contract must be awarded to the bidder who scored the highest total number of points in terms of
the preference point systems.
In exceptional circumstances a contract may, on reasonable and justifiable grounds, be awarded to a
bidder that did not score the highest number of points. The reasons for such a decision must be
approved and recorded for audit purposes and must be defendable in a court of law.
25.22 Evaluation of bids that scored equal points
25.22.1 In the event that two or more bidders have scored equal total points, the successful bid must
be the one that scored the highest number of points for B-BBEE.
25.22.2 If two or more bids have equal points, including equal preference points for B-BBEE, the
successful bid must be the one scoring the highest score for functionality, if functionality is
part of the evaluation process.
25.22.3 In the event that two or more bids are equal in all respects, the ward must be decided by the
drawing of lots.
25.23 Notification and Debriefing
25.23.1 After all bid responses have been evaluated and final approval for the award of a bid has
been granted, the SCM unit must ensure that a letter of appointment is written to the
successful bidder. The letter of appointment to the successful bidder does not constitute a
contract between the successful bidder and NRCS. A binding contract will only be in place
once the contract forms (SBD 7) or SLA has been signed by NRCS and the successful
bidder. Unsuccessful bidders should be notified separately.
25.24 Contract Negotiation and signing
25.24.1 After negotiation, the agreed terms and conditions for the supply of the goods or services
must be included in a formal SLA and be signed by both parties. The written contract must be
an accurate reflection of the terms and conditions of the RFB, and must take account of any
matters of significance emanating from the post-evaluation negotiation process. It is important
that consultation takes place with NRCS’ legal advisors where necessary during this process.
25.24.2 The power to sign a contract on behalf of NRCS rests with the CFO and CEO.
25.24.3 Two original contracts must be signed. One original must be kept by the supplier, and the
other must be kept by SCM and Legal Office.
26. Records
The Procurement Department will retain records of purchase orders for a period of five years. Audit
reports of checks on these records will also be filed and kept for a period of five years by Internal
Audit.
NRCS CSP 503-04
27. ANNEXURE A : SCM DELEGATION OF AUTHORITY No Description
Power, Duty / Function Executive Authority
Board / Board Committee
CEO CFO A B Other PFMA / Treasury Regulation
Remarks / Qualification
27.1 Bids over R500 000.00
27.1.1 Determination of a non-refundable deposit for Bid documents
27.1.2 Extension of closing period for Bid In consultation with CFO and SCM Manager
27.1.3 Shortening of closing of bids BAC
27.1.4 Appointment of Bid Specification Committee members
27.1.5 Appointment of Bid Evaluation Committee members
27.1.6 Appointment of Bid Adjudication Committee members
27.1.7 Approve variations,, extensions to Contract
27.1.7.1 Within the 15% limit of Treasury – of original transaction value
BAC / CFO / SCM to recommend – CEO to approve
27.1.7.2 Over the 15% limit of Treasury – of original transaction value
On recommendation from BAC / CFO and SCM
27.1.8 Approve cancellation of Contract On recommendation of BAC, Reported within 10 days to NT and AG
27.1.9 Awarding a tender
27.1.9.1 Final award of a tender as recommended by BEC
BAC
27.1.9.2 Recommendations in event where no final tender award
BAC
27.1.9.3 Final award of a tender not in line with recommended by BEC
CEO to approve on recommendation from BAC
27.1.10 Disqualification of bidders based on specified criteria
BAC
27.1.11 Advertising a tender BAC
27.2 Bids Under R500 000.00
27.2.1 Approval to obtain quotes from suppliers outside the NRCS supplier database
SCM Manager
27.2.2 Extension of closing period for Bid SCM Manager in consultation with CFO
27.2.3 Approve cancellation of Contract SCM Manager in consultation with CFO
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No Description Power, Duty / Function
Executive Authority
Board / Board Committee
CEO CFO A B Other PFMA / Treasury Regulation
Remarks / Qualification
27.2.4 Approve variations to Contract / PO
27.2.4.1 Within the 15% limit of Treasury – of original transaction value
On recommendation from CFO and SCM
27.2.4.2 Over the 15% limit of Treasury – of original transaction value
On recommendation from CFO and SCM, Reported within 10 days to NT and AG
27.3 Other SCM Issues
27.3.1 Appointment of Disposal Committee
members
27.3.2 Approval to deviate from normal
procurement procedures.
Reasons must be recorded and approved
27.3.2.1 Transaction values R 10 000 and less Reasons must be recorded and approved
27.3.2.2 Transaction values over R 10 000 Reasons must be recorded and approved
27.3.3 Ex- post facto procurement approval Reasons must be recorded and approved
27.3.4 Approval of transactions where the minimum number of quotations (at least 3) were not obtained
Reasons must be recorded and approved
27.3.5 Bids where the lowest bidder was not selected
Reasons must be recorded and approved
27.4 Demand Management plan
27.4.1 Preparation and submission of the Demand management plan
27.4.2 Approval of demand plan
27.4.3 Approval of procurement not on demand plan (Over R500 000)
27.5 Issuing bids
27.5.1 Open bids SCM Manager in consultation with BAC
27.5.2 Closed bids BAC to inform CEO
27.6 Approval of bid awards
27.6.1 Up to R500 000.00
27.6.2 Between R500 000.00 and R2 000 000.00
On recommendation from BAC
27.6.3 R2 000 000.00 and over On recommendation from BAC and
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No Description Power, Duty / Function
Executive Authority
Board / Board Committee
CEO CFO A B Other PFMA / Treasury Regulation
Remarks / Qualification
CEO
27.7 Sign / release official company orders on goods / services procured
SCM Manager Releases informed by procurement processes per the SCM policy.
27.8 Contracts
27.8.1 Sign contracts up to R500 000.00
27.8.2 Sign contracts R500 000.00 and over
27.8.3 Approval to negotiate a contract To be done in conjunction with Legal
27.9 Approval of payments: All categories of operational expenditure
Authorisation of purchase requests (approved within the budget) for own cost center
27.9.1 Less than R10 000.00 Managers and Senior Managers
27.9.2 Less than R20 000.00 General Managers
27.9.3 Less than R50 000.00 Executives / Business Unit Heads
27.9.4 Less than R500 000.00 Approval across cost centers
27.9.5 Less than R2 000 000.00 Approval across cost centers
27.9.6 R2 000 000.00 and over Approval across cost centers
27.10 Approval of payments: Capital expenditure
Authorisation of purchase requests (approved within the budget) for own cost center
27.10.1 Less than R20 000.00 General Managers
27.10.2 Less than R50 000.00 Executives / Business Unit Heads CEO to be notified
27.10.3 Less than R500 000.00 Approval across cost centers CEO to be notified
27.10.4 Less than R2 000 000.00 Approval across cost centers Board to be notified
27.10.5 R2 000 000.00 and over Approval across cost centers On recommendation from CEO